The social media measurement smackdown

Last week I was involved in what one tweeter characterized as an “ROI smackdown.”

I was speaking on a panel for Social Media Week New York when one of my fellow panelists said “This ROI stuff is just a bunch of crap. I’m so tired of it. You can’t measure what you’re doing and people should not even try.”

I began to twitch.

“I agree,” said the second panelist. “Too much focus is placed on measurement.”

My head began to throb.

“As a social media marketer, I can’t measure what I do,” said the moderator. “I just do it.”

At that point, the dam broke.

“Respectfully,” I began, “I disagree with everything that has just been said! As marketers we should measure EVERYTHING. And generally, we can.”

And it kind of went downhill from there. This dialogue is nothing new. It is merely a symptom of an anti-measurement bias creeping into the blogosphere.

The gurus aren’t helping.

Unfortunately, the tone is being set by some of our most beloved social media celebrities such as Gary Vaynerchuk, David Meerman Scott and other high-profile pundits. When Gary is asked about the ROI of social media his famous reply is usually ‘Well, what’s the ROI of your mother?” Scott’s retort is usually something like “Why have a double standard? You don’t measure the ROI of the company receptionist.”

These make great sound bites, and I sincerely respect these fellas and love the passion and wisdom they bring to their work. But after hearing their rants on measurement for a couple of years now, I am agitated to the point of breaking out in hives when I hear it. Promoting an anti-measurement agenda is misguided and confusing to young marketers.

First, in their defense, I think the point they are trying to make is that social media represents an evolution in the way we communicate and we shouldn’t let an ROI calculation (or lack of one) stop us from getting on board. If you are waiting for a pie chart to make a decision, you’re probably missing the point.

Second, I fully recognize that calculating true ROI is frequently impossible. However there are many meaningful leading indicators and non-financial measures that can be tied to stakeholder value. We have so much data coming at us, there is simply no excuse not to measure.

Why you MUST measure.

Here are four reasons why you MUST measure the results of your corporate social media activities.

1) There is an implied value to everything. At some point in the life of every company, there will be a financial imperative to slash overhead costs. The bubble always bursts, at least in a free economy. When that happens, everything will be evaluated under the icy glare of number-crunchers — do we cut or not cut? This is the day of reckoning that defines the ”implied economic value” of any effort. Yes, the social media marketing effort will come under scrutiny. So will the receptionist, your wireless plan, and all these other mundane daily activities not normally associated with an Excel spreadsheet. When it’s your turn to justify the existence of your marketing efforts, you better be able to demonstrate business value, and it better be an explanation more convincing than “Don’t you see that measuring social media is like measuring your mother!”

2) If we are expending human effort, it should be justified. Every economic activity in a corporation directly or indirectly has to contribute to shareholder value or eventually it will go away.

Let’s look at how “un-free” social media really is. Let’s assume you have one person working full-time on social media marketing. We’ll assign that person a salary of $60,000. In a typical company, standard health, 401(k) and other benefit costs equal another 50% of the base salary, or in this case, $30,000. We’ll assign another 20% of base salary for overhead such as office space, shared services support and technology. That’s $12,000. We won’t even address travel, training, or bonuses.

So, our minimal full-up cost for one social media professional is $102,000. As a business owner, are you willing to spend more than $100,000 per year without requiring any accountability for a return? What kind of a company are you running?

3) If you’re not measuring, how do you know you’re making progress? Although Gary V may not be plotting his social media efforts on a chart, I guarantee you he has an acute sense of the return on his social media presence and also knows the point where there is a diminishing return on his efforts. That’s easy for him (and me too, by the way) because he can see the results every day. It’s more complicated in a corporation. Explaining that “it works just because I know it works” may be OK for an entrepreneur but it ain’t going to fly in a board room.

I can’t imagine asking a client to trust the progress of our social media effort without some indication of continuous improvement. To support your credibility, your long-term viability, and your personal career in social media marketing, YOU. MUST. MEASURE.

So please Mr. Vaynerchuk, Mr. Scott and all the other gurus out there … please re-consider what could be mis-interpreted as anti-measurement rants. It makes for entertaining quotes, but it’s providing confusing advice to many young people looking to you for thought leadership.

Thank you Mark I have been hearing anti measuring background noise on the rise. All I can say is yea right I wish. If anyone can close a deal with any company without showing the results in any marketing medium….sign me up!

markdisomma

Mark – I agree with all your points. The last time we talked about having a paradigm that couldn’t be measured in traditional terms as I recall was … the good old dot.com days. And look what happened then. Just because the model is problematic does not mean it is not needed. The mother comparison is ridiculous because, hopefully, you’re not paying to have a mother. And the receptionsit model is misleading because whoever employed them did assign a value and must have expected a return from that investment. He/she is paid a salary and has a job description.

Having said that, I see too many marketers going the other way and trying to assign value where there is none – or, more to the point, none to me.

My own view is that marketers do indeed need to assign a value set for their social media: one that works for their objectives. That value set could be ambient, it could be by way of endorsement, it could be monetary … whatever the criteria used, what’s vital it seems to me is that the criteria used have value to you and/or to your brand and/or to your decision makers.

One thing is absolute. No social media or poorly strategised social media is worth nothing at all. It may even be harmful.

You have to measure – no question. But what you measure, the priority and value you assign those measures, and what they actually yield – there, I give brands a little more latitude.

Funnily enough, you can measure the ROI of your receptionist. Does she blend well with other employees? Does she represent your brand well or give people a negative view of it? Does she piss people off with her surliness on the phone or does she exude confidence and positivity?

If she turns people away and you lose business and customers because of that, she’s instantly impacted the ROI of her salary, training, etc.

I worked for a company that actually replaced the receptionist with a computer answering system and also a keypad on the lobby door to buzz whoever you were there to see. This was done to cut costs. Did it work? The customers hated it. Was it cheaper? You bet. The ROI of the computer system was a savings of 60% compared to an actual person.

As for Gary’s now famous what’s the ROI of your mom question, I couple it with his context is king philosophy. Content: What’s the ROI of your mother? Context: Asking that question in an orphanage.

Even Gary’s talks have recently shifted to the “I love social media because it sells shit” angle.

To me the fact that there is even still an ROI debate shows how ridiculously pre-pubescent this industry really is. If we want to be treated like grown ups and sit at the grown up table, we have to act accordingly. And that includes treating social media as a grown part of doing business.

I think the bigger problem is they don’t know how to measure the ROI on social media. The templates for that are still being built. I think each corporation has to take a look at marketing in general, not just social media, and develop their own ROI plan for marketing. How do you know that billboard is creating revenue? Did that commercial work for you? How do you measure those things. It’s no different for social media. Figure it out people. This is business after all.

You know Chris, that is what I think too. It’s rather shocking when experienced marketing professionals shun measurement. Makes me wonder how they got that far without measuring and accountability. Many thanks for sharing your wisdom today.

It makes me sad when businesses don’t track. I’m not even just talking about the marketing department. If you’re using social media in the customer service, human resources, sales departments, or whatever department you’re using it for, define your goals and metrics then track them. I wrote a post last week on how the ROI of the telephone was scrutinized 125 years ago. Bell needed to prove ROI before businesses adopted the technology. The other argument of what’s the ROI of the phone is moot because it was proven 100 years ago.

So many crappy social media myths to bust. So much perpetuation of misinformation to stop. The upside is that this conversation is happening more often these days. I hope that’s a wake up call to the industry as we shift from social media to social business. I do believe it will be as businesses demand more from their social media agencies, consultants, etc. We can only hope that the cream starts its rise sooner than later.

I think part of the problem is the false precision often attributed to a term like “ROI”. If most people knew the incredible assumptions that firms have to make to estimate profitability of products or customers, they would realize that fuzziness in the measures is nothing new.

“However there are many meaningful leading indicators and non-financial measures that can be tied to stakeholder value.” – I couldn’t agree more!

At the end of the day when you begin using Social Media it should be because you have a goal you think it can fulfil, and with every goal there should be a way of measuring whether it has been met or not.

Very simplistically if you want to raise awareness than it can be as simple as tracking fan count (very basic example) but if you don’t have measurable goals then why are you using social media in the first place?

The ROI of my mother is 100 to 1. She cost me nothing but delivers untold value.

The implication of the anti-measurement brigade is that a social media execution that attracts zero followers, no feedback or comments, no shares and zero clicks is as successful as an execution that creates an active community of users, engages customers and generates WOM.

The starting point for any type of marketing planning is the objective, followed by the metrics that will be used to determine whether the marketing has achieved said objective.

A program that aims to deliver clicks, likes and follows is as valid as one that is designed to generate sales if delivering clicks, likes and follows is your objective.

I am laughing out loud at this, thinking back to some of the eye-opening assumptions the accountants make : ) We’re lucky to be living in a era though, of almost limitless possibilities to connect the data dots in smart ways. We just can;t be lazy marketers. Thanks Gary!

I like this perspective very much Daniel. A good way to put it. Thanks for caring enough to comment!

Anonymous

Thanks for this post, Mark. I’ve often referred to the older post you wrote on this topic when I’ve presented to my team about the importance of measuring the effects of our social media efforts. Our measurement methods continue to evolve as we work hard to convince others that social media is indeed a worthy investment of time and manpower toward our cause. Some get it, some don’t.

I’m in the public sector, working fora non-profit, so our success isn’t technically supposed to be tied to “sales.” We’re asking questions like, “Is our social media presence raising more awareness for our cause?”, “Has our social media presence changed the way people are talking about Topic A, as well as how the press is reporting on Topic A?”, and “Of the people who like and follow us, what percentage are sticking around to listen to/participate in the conversation?”

I feel like we have to more assertively “justify” social media not just to clients who fear negative feedback, but to the general public who might unjustly view it as their tax dollars going toward paying someone to “play on Facebook all day.”

I’d love to hear your insights on comparing social media ROI measurement between the private and public sectors. What sort of questions would be driving your ROI measurement if you were in my shoes? Are the challenges really all that different between the two? If you have any thoughts to share, please do!

I really think you are asking the right questions Christine. I have done quite a bit of work for non-profits and i know this is a different animal. I really think the opportunity is to connect to people who care, tell your stories (or better yet, let others tell your stories) and build an emotional connection that will lead to engagement, donations and volunteer hours.

When thinking about measurement, I focus on … “what is the behavior or attitude I am trying to influence?” And then try to find the logical measures for that. While “likes” and “comments” might not make sense for a company, it might very well be an important measure or interest and engagement for you as a non-profit.

So I really think you are on the right track. You’re asking smart questions that will lead you down the right measurement path I think. Great job!

I get what Gary V. and others are saying, but even the most basic social media measurements (read web/blog traffic) can supply an idea of whether or not your efforts are producing SOMETHING. And speaking of Gary, I guarantee that he measures everyone’s performance some how at Vayner Media.

And one more thing. Don’t measure?!? Good grief. Social marketing/media has allowed us to actually target, pinpoint, engage and measure how well our strategies are playing out. Never in my 25+ years as public relations practitioner can I confidently tell my clients how to move the needle and get the proof that the tactics are working.

Thanks for your insight, Mark. The most important ROI Smackdown we need to be concerned with is the one from the client and/or CFO. Perhaps companies or departments aren’t measuring because they’re not sure what the goals are. Since social media is the farthest thing from free, we need to daily quantify what we do. What’s the two-hour investment on Facebook worth? Where does it fit into your marketing campaign? Is your goal to attract media attention? To leverage your press mentions and op-eds? To expand your audience? What’s the ROI of competitive intelligence? Since time is the ultimate non-renewable resource, a company should do due diligence on every marketing and communications investment.

Mark, great post. I agree we have to keep focused on measurable ROI. I thought about Danny’s comment about measuring the ROI of a receptionist. What is the lens we look at to repeatable measure ROI? It’s not really process, as what process does the receptionist do? Probably many if you really look at it.

A topic I’ll be exploring in http://www.its-about-people.com is the role of “people” (no surprise given the blog name) as the lens to crack the code on a repeatable and measurable ROI!

Love this. Especially: “if we are expending human effort, it should be justified.” People do tend to think social media is free, and then they value it accordingly. There’s no free lunch, so shouldn’t we know how much this meal is costing us? Beth Kanter has also recently blogged on measurement, and she has some excellent posts on the subject. Part of the battle is knowing what we want to accomplish with our various social strategies. Once we know if we’re trying to build awareness, fundraise, encourage petition signing, etc., then we know what to measure. Otherwise we’re just meaninglessly counting stuff. Again, thanks!

How funny – I just announced a few hours before you published this post that I’d like to put together a Twitter “roundtable” on Social Media ROI because the lack of understanding on this topic has been driving me crazy too.

Here’s the bottom line, and it’s really very simple (also very sad). If companies do not begin to understand that they are investing money against zero sales, they will go broke. Or they will lose enough money via their social media efforts that at the very least it will impact everything else. These companies, a year or two from now, will be completely shocked at the state they are in. They did everything right, have great social media presence and followings. Where did they go wrong?

Anything is trackable. When you take a prospect out to dinner, you don’t just throw away the receipts. You keep them and turn them in, right? And then if you make a sale out of that relationship, you know exactly how much you put in. Social Media is no different in this regard. It’s just instead of a dinner here or a coffee there, it’s someone’s time day in and day out. Still has a cost though.

Great post. I hope you’ll be able to join the chat once I get it together.

When someone asks for the ROI, it is a signal that they have no interest in the project. Many times they know that there is no appropriate measurement, at this point, and won’t be unless the project can move forward.

While I agree with the general tenor of your remarks, and there is no point in merely accumulating clicks, likes, or retweets, there is a strategic point behind saying ROI is irrelevant.

Great post. I too am quite weary of the ROI discussions because they seem to be a platform for those that are naturally oriented towards a metric-centric approach to talk about how right they are and those that don’t like measurement to bash the numbers guys.

One of my mentors, a CIO at a top consulting firm would always tell me, “if you aren’t measuring it, you can’t manage it.” It is something that applied to enterprise IT projects 12 years ago and still applies to social media today.

At McDonald’s, we are tracking dozens (if not hundreds) of metrics using various tools across the business, brand and products.

The blessing and the curse of social is that it is highly measurable. Perhaps more measurable than any other marketing platform. However, there are no industry-standards in place which makes gauging success difficult. Even at my company, the amount of chatter and engagement varies wildly from product to product. For example, the numbers for McRib will always be much larger than chicken sandwiches.

Additionally, since all of our sales are offline, there is not a straight, solid line between someone talking about McDonald’s food and then their purchase in store. However, that same challenge exists for tv, radio, billboards, etc. As an organization, we measure the effectiveness of all media but are also very particular in pointing out that we measure the CORRELATION between media and sales. So as much as I would like to say that there is an ROI for social media, it is relative at best given the gap between online chatter and offline purchase.

Hey Mark, I find it so difficult after all that has been said and proven over the past few years that anyone could say SM should not / could not be measured. The only thing I can think of for those types is that perhaps they are afraid of their own capabilities or inability to deliver on thier “claims”?

Another thought came to me as I started thinking about the reality of this. One of the key value propositions of Social Media analytics is the ability to anticipate and predict the future based on understanding of what people are saying online. Measuring SM activity to determine value at the corporate level is no different in that this measurement activity will identify not only the value of what is being done but will also identify new opportunities. If no measurement is done, new opportunities to capitalize on SM will not be identified and SM utilization itself will stagnate.

But, if in their defence (as you stated) if all they are saying is to get involved without worrrying about measurement initially, then they should say that! And, by using examples of tremendous successes (ie: case studies), they can support their claims (with measured results????). Fear if the unknown is a major human motivator (not to do something). Even ths slightest validation to help people get started is better than no validation and just “Vision”. Once they start, if effective, we all know they’ll want more.

I believe (and always have) that in order to move this business forward, it all comes down to measurement.

I really like Danny’s comment. In reality, anything can be measured if you really think it through.

Totally agree with this post and Danny’s receptionist example. As Mark pointed out, social media is not free – it requires employee resources plus production and ad costs. Companies need to know where to allocate resources and why. Anyone who has worked with major marketers and their agencies, the ones who are actually driving social media spending/thought leadership, knows that metrics rule. Period. Some metrics are soft, some hard…but if you want to work with the ‘big boys’, you better be able to prove the ‘worth’ of your social media efforts or you will be laughed out of the meeting.

I’ve been working on a way of measuring customer retention via social media – a real and valuable use of the channel. People get bogged down in the absolute bottom line. This can be attributed to many reasons, but a key one is internal pressure – if the numbers aren’t heading up the way after some SM work, the defences immediately spring up. Too many hide behind the ROI excuse.

Companies want and need measurement as a threshold of what is working and what is not. To not measure is to throw money out the window and hope that it returns. How can we be successful if we don’t know if we are implementing successful tactics?

Although there isn’t a standard formula for social media ROI measurement, it doesn’t mean that it doesn’t exist. Each company’s social media strategy is different and, if you break down the cost of tools, reporting, human resources and the like, you can figure out the ROI without issue.

It’s time we put the logic back into social media and, respectfully, disagree with anyone else that says it cannot be measured.

There is definitely an ROI to Social Media, and to say there is none is either a lie or self-serving. As others have said, the metrics may not be in hard numbers but that doesn’t mean ROI can’t be examined. Marketers have been dealing with soft metrics for decades. Years ago, putting up a billboard offered to deliver X million impressions solely because someone measured how many cars drove by it in an hour. In this day and age, many of the measurements are not so different. Just because we’ve added in technology which should be measurable doesn’t mean we’ve moved from using ballpark numbers to only relying on hard data. It’s marketing, which is not an exacting science.

As you point out, Mark, a company doing social media in-house has costs. Sure, there are cost centers within companies that are not responsible for delivering revenue but delivering revenue is very different than ROI. A legal department is not responsible for delivering revenue but I can guarantee you investments of time and money are calculated to determine if they’re worth it. Same with HR, and IT.

And as for the receptionist’s ROI, we all know there is one even if it can’t be measured and put on an excel spreadsheet. If you’ve ever hired a bad receptionist you know there is a huge cost. And on the flip side, hiring an amazing receptionist delivers untold benefits and returns.

Every day, employees have to justify the expenditures needed to attend social/new media conferences. While it may appear that these types of conferences are for drinking with friends and singing karaoke, companies are not going to invest in sending employees or committing sponsorship money to social/new/emerging media conferences if there’s nothing to learn or gain – a return on the investment of thousands of dollars. Few companies do things because all the cool kids are doing it.

And the ultimate immeasurable – Employee Morale – still gets investments, despite the very few objective/hard metrics. Anyone suggesting programs/benefits to help with employee morale MUST justify the expense in some manner, despite not being able to measure “Happy”. And with that, the argument for not measuring social media ROI falls flat.

I really have to thank you for this Mark, because as a very young marketer with my own style, I STILL absolutely rely on your (and other’s) thought leadership. One day I’m trying to figure out metrics on a new tool then another day I see through Twitter that it’s psh psh and focus on engaging and you can sense the ROI on your own, so I think “Ok, don’t get so caught up in numbers, focus on engaging instead….” You’re right, I do get confused and a bit frustrated because I’m not sure what to do with my time to learn/apply it. I needed someone to give it to me straight with good reason AND confidence why I should do this. You make a very compelling argument Mark.

Now what would also help is – because there’s so much out there – what are the best tools that we should actually become very skilled with for determining ROI?? Especially so it’s something we could put on our resumes or mention in interviews…such as Certification in Google Analytics. Anyone?! 🙂

I’d add to your argument that I am sure Vaynermedia’s clients want some kind of report showing the impact of what they are doing. I also think that anyone clinging to the 2008-ish SM can’t be measured bullshit will be exposed as a fraud moving forward, either that or they will jump on the measurement bandwagon and claim that their previous conflicting opinions were a sign of the times.

We’ve been measuring out output since day one. Are there holes at time? Yes but so is every attribution model doesn’t mean you shouldn’t do it.And on the mother comment, well, some people’s mothers can put a dollar figure next to their time allocated for a task (and no, not that time get your head out of the gutters). So it shows some arrogance to a space that without measurement will always be a cute phase at a company.

Of course we need to measure. And to [email protected]:twitter , I would say that we no longer have a receptionist (as a few other commenters mentioned as well).

I’m a numbers junkie, having spent at least 5 years in analytics. So I say this with a clear view of the potential, but also some of the limitations, of numbers.

One thing we need to be careful of is the way an ROI measurement simplifies everything. If you boil it down to incremental income versus incremental investment and make it a percentage or a multiple, all the accompanying assumptions, recommendations and projections are easy to dismiss.

Measure social media so you can manage it. So you can discuss it. So you can learn from it. But be very cautious if you are measuring it as a black-and-white way to decide if you should continue.

If social media isn’t paying off, your strategy may be doing something wrong, you may not have given it enough time or it may really be destined to not work for you. The question is, does your measurement help you tell the difference? If it isn’t working but it doesn’t answer that question, measurement may be leading you astray.

Finally, the Rock has come back to Social Media Measurement and he’s laying the Smacketh down on your rudy-poo candyasses! You’re laughing if you ever watched wrestling or scrunching your eyebrow if you haven’t. Either way, a stellar perspective here Mark.

Now that you’ve forced my hand and I’ve measured my ROI on my Social Media activity, I feel a tiny bit sheepish. Right now, there’s no way to spin it, I clearly have a negative ROI. I’ve got zero revenue coming in from my activity, and technically, every blog I comment on or tweet I send during “work hours” cost me based on the time I’m not spending on income producing activities.

With that being said, things need to change. Any perspective that you can add regarding my crappy returns 🙂

This is such a fundamentally important issue. Good for you to make a stand. My fear is that new businesses or businesses new to social media marketing either buy into the Gary V position because it’s easier or don’t look at the ROI because they don’t have a clue how to measure.

I get asked to share my spreadsheet templates at least three times a month by customers who have heard that they need to track their data but don’t have a clue where to start.

I think the 1st of your four points is the most concrete… Sooner or later, the boss will want to know whether this aspect of marketing is giving him/her a good ROI. Every business must measure, If they don’t, they won’t be in business very long. The only point that I can give some credence to as far as the “don’t measure” crowd is this, it must be measured in a different way than other forms of marketing. And you really must understand and use social media well to make it work.

I have a boss in mind… his technology officer tweets 3 times a day and posts his real estate listings on several sites and has created a FB page for him. check in the box. done. Some day he’s going to want to see the ROI, and it will be lacking. But the problem is he doesn’t understand social media at all. He’s hired someone to tweet for him. That’s it.

So, I think the issue of measuring ROI is a lot more complicated than it used to be when you just put an ad in the paper. $100 for the ad… 10 phone calls… 2 customers. Done. Measured. Social media… a lot more complicated. Not that it can’t be done, but just differently.

Metrics must both qualitative (leading to quantitative) and quantitative (where they can me). We must not let striving for the perfect stop us from getting significantly better in Pharma and Healthcare Social Media.

Totally agree with this perspective. To add, and based on what I see in the work that I do both as a technologist and a business strategist, I think the problem boils down to a few fundamental things:

– Many orgs don’t even understand their own business or product goals to then understand what socmed and other social technologies can do for them (the larger issue of becoming “flat”).

– Notions of value are often completely out of whack; one example is employee culture and mental/physical health. Orgs typically don’t think to boost this as a function of better work productivity (using social technology) and then equate that to a return or multiple returns.

– On the tech side of things, most orgs have a hard time understanding how to manage data (specifically, structured and unstructured data) to then build an appropriate measurement system than includes rich analysis (correlating the right data sets).

– They don’t invest in the right ways; there’s approach and then there’s infrastructure, and identifying emerging or transferable skill-sets is elusive to most HR groups.

It was a pleasure to met you last week in New York at Social Media Week and spend some time getting to know you as well.

I must confess, I was “the moderator” on the said panel (see full 60 minute video at htp://lc.tl/kv) and am guilty as charged.

I did come off the stage and feel a but uncomfortable that the I and rest of the panel also became signed up members of the “anti measurement” brigade for an afternoon.

I suppose in the heat of the moment we all thought that having to measure ROI means having to measure EVERYTHING – as you’re doing it. This is hard, and can get in the way of actually doing it – that was more of my point.

What I should have said was

“As a social media marketer, I can’t stop what I am doing just to measure it,” said the moderator. “so I just do it, then work out if I have met my goals afterwards”.

I agree (and we mentioned this on stage and off) that you have to have goals.

My goal of going to Social Media Week and supporting Ogilvy were two-fold

I believe we have done both so my (non-financial) measure of the week is in credit – meaning there WAS a return and I measured it but not with pinpoint accuracy.

I do absolutely agree with you that you need to have an idea of your goals, and have that gut feeling of you have attained it if you aren’t measuring every minute detail.

PS I have read an advance copy of your new book and think it is fantastic – and given it is called “Return on Influence”, lends itself to having goals and outcomes around identifying and marketing to influencers.

As I stated in my article, ROI (strictly a financial measure) may be irrelevant under the circumstances, but measurement is not. I can see how this would be a stall tactic, as you mention. Thanks for the comment Michael!

Heck a lot of measurement is inexact due to the cost and resources involved but with so many great free sources out there like Google Analytics, even small businesses should be able to put together a rudimentary dashboard. Thanks Jeff!

Probably a discussion we could have off line, but I know you are starting your new business and for any new venture, it takes time and patience. I doubt a slow start in any business can be laid at the feet of just social media marketing. So many factors. Pricing, product, timing, competition, the relevance of your business plan — to name a few. I ask every entrepreneur if they have two years to devote to building a business. It usually takes that long! Heck, it took me 18 months before anybody [email protected]:disqus was reading my blog : ) Maybe we can have a quick call to see if there is something I can do to help.

Sounds like an interesting concept. Would love to join if I’m available. Send me the details. Specifically for Twitter, I do have quite a bit on value and measurement in The Tao of Twitter book. Thanks Margie!

That’s a great question Anne. Probably worthy of an entire post. Maybe a book. This is a crowded field. I am alerted to new platforms almost weekly. Honestly, at least for small businesses simple, free measures usually suffice. For example one customer wanted to build community and simply recorded a stacked bar chart of comments + RT’s + email inquiries as a simple measure of engagement. If those things are going up, it is probably driving the right behavior in the organization (and keep that in mind!) The large brands I work with have sophisticated war rooms tracking everything around the world. Pretty neat to see!

It’s coming. Seriously. Have been seeing some pretty amazing things lately. Imagine connecting chatter to the FB timeline. To Foursquare check-ins. Starts to get interesting. Will send a few ideas your way soon. Would be fascinated to see how you guys are dealing with some of this stuff. : )

Anonymous

Were your fellow panelists gainfully employed? They shouldn’t be, or at best probably won’t be for long. How can anyone sit around all day collecting a pay cheque for doing X and not know if X is actually accomplishing anything? Or worst still, claim that knowing doesn’t matter? In my town such a casual attitude is called a hobby.

Finally, I agree, there’s only so much benefit to trying to measure the ROI of what some times comes down to the equivalent of digital paperclips. But when something as simple and thorough as link tagging is ignored, well then your fellow panelists deserve a lesson in ROI. The kind of lesson that comes written on a pink sheet of paper.

Hi Mark, that would great I’ll certainly bear that in mind when I have all of the method sorted.

Michael Blowers

Wow, great blog post – 38 replies in a day or so…that’s some ROI! Just shows the importance of the issue. I still can’t believe there are big firms who do nothing…monitoring or analysis. Just crazy how they can justify putting their heads in the sand.

This sort of thing is challenging. To make it work requires real thought; you can’t just pick a solution off the shelf. Organisations are unique, as are their methods and delivery, and therefore should be their measurement. It also needs educations and PR needs to learn not to be frightened of numbers.

In fact, we need to embrace the numbers, both good and bad. I’m conservative when it comes to this stuff because I have seen first-hand what happens to people who don’t have the numbers to back up what they do! Thanks very much Michael!

For those looking for a simple measurement/reporting solution, SproutSocial.com has been a welcomed addition to my firm’s arsenal so far.

Anonymous

Way back at the dawn of marketing we had a debate between the direct marketing people and the “creatives”.

The job titles have changed but the mindsets haven’t. But the debate is just as sterile as it ever was.

Making everything measurable is what has led to the current sales structure. Because his commission depends on it, sales people don’t do anything not directly linked to the “sale”. This stops their company building relationships, thinking longer term and engendering loyalty.

Customers buy through multiple touches and there is rarely a single one which made the sale. So measuring social as a direct response mechanism will give false figures – benefiting from first touches made elsewhere and losing where it made the difference but the customer bought as a result of another touch by another method.

Marketers have a host of objectives, some of which can be measured and many of which cannot. Should you stop doing your competitor comparison, because it hasn’t a direct ROI? Should you stop R&D? Focus groups?

Social is part of a larger debate. And a left brain/right brain conflict which will never be resolved.

Could be a good recommendation [email protected]:disqus who was looking for something like this. Thanks Chris!

Anonymous

btw, I think the concept of actually-it’s-not-free deserves its own full article/post. That myth is extremely detrimental to SMBs. Time is money. And even just an hour a day or doing something wrong (or less than optimal) can be costly. Yet the perception is the tool is “free” so I don’t need to pay someone to do it. The it’s-free guru promoted myth is probably done more damage to SMBs than (poorly done) PPC.

Thanks very much for the dissenting opinion. On some of these intangibles, i fall back on this place of “if we were in a financial crisis, would we keep doing this?” In that scenario, you can bet people will come up with descriptions of the value they provide. As I stated in the post, it would be impossible and stupid to assign a direct ROI to every activity so I think we’re in agreement there. Thanks very much for the great comment Peter.

I believe we have done both so my (non-accurate) measure of the week is in credit – meaning there WAS a return and I measured it but not with pinpoint accuracy.

I do absolutely agree with you that you need to have an idea of your goals, and have that gut feeling of knowing you have attained it if you aren’t measuring every minute detail.

PS I have read an advance copy of your new book and think it is fantastic – and given it is called “Return on Influence”, lends itself to having goals and outcomes around identifying and marketing to influencers.

It was a pleasure to meet you last week in New York at Social Media Week and spend some time getting to know you as well.

I must confess, I was “the moderator” on the said panel, see the full 60 minute video at lc.tl/kv and am guilty as charged.

I did come off the stage and feel a bit uncomfortable that the I and rest of the panel also became signed up members of the “anti measurement” brigade for an afternoon.

I suppose in the heat of the moment we all thought that having to measure ROI means having to measure EVERYTHING – as you’re doing it.

This is hard, and can get in the way of actually doing it, as you mentioned in a recent post on Twitter ROI – that was more of my point.

What I should have said was

“As a social media marketer, I can’t stop what I am doing just to measure it, so I just do it, then work out if I have met my goals afterwards”.

I agree (and we mentioned this on stage and off) that you have to have goals.

My goal of going to Social Media Week and supporting Ogilvy were two-fold:

1. Increase mentions and awareness of Kred in NY and beyond

2. Deepen our relationship with Ogilvy

I believe we have done both so my (non-accurate) measure of the week is in credit – meaning there WAS a return and I measured it but not with pinpoint accuracy.

I do absolutely agree with you that you need to have an idea of your goals, and have that gut feeling of knowing you have attained it if you aren’t measuring every minute detail.

PS I have read an advance copy of your new book and think it is fantastic – and given it is called “Return on Influence”, lends itself to having goals and outcomes around identifying and marketing to influencers.

it was a pleasure to meet you last week in New York at Social Media Week and spend some time getting to know you as well.

I must confess, I was “the moderator” on the said panel, and am guilty as charged.

I did come off the stage and feel a bit uncomfortable that the panel had become signed up members of the “anti measurement” brigade for an afternoon.

I suppose in the heat of the moment we all thought that having to measure ROI means having to measure EVERYTHING – as you’re doing it.

This is hard, and can get in the way of actually doing it, as you mentioned in a recent post on Twitter ROI – that was more of my point.

What I should have said was:

“As a social media marketer, I can’t stop what I am doing just to measure it, so I just do it, then work out if I have met my goals afterwards”.

I agree (and we mentioned this on stage and off) that you have to have goals.

My goal of going to Social Media Week and supporting Ogilvy were two-fold:

1. Increase mentions and awareness of Kred in NY and beyond

2. Deepen our relationship with Ogilvy

I believe we have done both so my (non-accurate) measure of the week is in credit – meaning there WAS a return and I measured it but not with pinpoint accuracy.

I do absolutely agree with you that you need to have an idea of your goals, and have that gut feeling of knowing you have attained it if you aren’t measuring every minute detail.

PS I have read an advance copy of your new book and think it is fantastic – and given it is called “Return on Influence”, lends itself to having goals and outcomes around identifying and marketing to influencers.

Andrew Grill CEO, Kred

PeterO

It could well be that the “not measuring” ROI camp quite like the approach because it supports the mystique around the “guru factor”. So much easier to maintain your position at the top of the pile if you don’t openly publish ROI figures for the majority of your work. I suspect, but can’t prove, that the averaging effect taken over the “long run” would show the odd spectacular success mixed with a lot of average stuff.

Thank you for this post. As a college professor who is teaching young marketers and who is in the process of developing a course entitled “Web Metric and Analytics” to specifically address ROI, measurement and metrics I can tell you that the data and measurement is vital.

Let us not live in the world of “feel good metrics” or “it looks good” or the traditional advertising heyday when the win was not in how much action was taken but that the ad looked great in the magazine. Training people to think about the objectives they will measure using both quantitative and qualitative data gets them thinking intentionally about how to leverage each channel and each tool for maximum effectiveness. Without that data, then the job of the social media manager will be relegated to the lowest rungs of the ladder or end up on the cutting room floor.

Distinguishing between entrepreneurs and businesses is also an important aspect of your post. And I agree that it is different.

Keep twitching and know that there are those of us on the front lines who are teaching who know just how important this all is.

That would actually be fun as long as I am restrained by a series of interlocking ropes and chains. : )

Claire Dunford, @rainbowclaire

I agree with you Eric, measurement is important but you need to know exactly what you’re measuring in order to fully understand the impact of your strategy.

As a consultant I often find that I’m given KPIs to achieve: on one hand, that’s fantastic – it means the client wants to understand and have the control in how their money is being spent – but on the other hand it frustrates me know end when the set KPIs are the wrong ones…

Results and outcomes are different things. ROI targets and KPIs should be adapted in order to get an accurate overview of activity. That’s where my current battle is…

David Meerman Scott

Mark, I’m all for measurement. That’s cool. I do it myself all the time. What I disagree with is when the bosses throw ROI requirements at real-time media like Twitter and blogs as a way to say “NO” to something that they are ignorant of. And I love to point out the hypocrisy that they do not calculate the ROI of another real-time media – their blackberry. Nor have they ever really measured the ROI of television commercials.

Hiding behind “measurement” as an excuse to not do something is a rampant problem, not just for social media but for anything that is new and out of the comfort zone. I would get so angry in the days of SPC when managers hid behind control charts to avoid making a decision. So your point is well-taken and legitimate.

A concern I have, however, is that you are a rockstar and have a tremendous influence on young professionals. Your name comes up in classes and conferences all the time. And I feel like I’m fighting a losing battle because people seem to hang on, and remember, your catch phrases and make up their minds that measuring social media is like measuring your pants. I mean this attitude is rampant. A young man asked me last week — “my boss wants to measure our efforts … how do I tell him that we don’t need to?”

I’m hoping you, Gary, and others will adopt a more encouraging stance around measurement. For example, comparing the on-going, resource-intensive cost to create and nurture an effective social media program and the relatively small infrastructure cost of a Blackberry is apples and oranges. It’s a confusing message.

Many thanks for taking the time to comment today and your tireless contributions to the field, David. I hope to meet you in person soon.

Brendan Cooper

What I tend to find is that yes, ROI is important, but it’s the company structure that gets in the way.

So, for example, you take on business to help out with, say, a Facebook page. You tell the client that’s imperative you get an overview of everything – Twitter, blog, YouTube, right the way through to the website.

But often, they all stand separately, whether managed by different groups or even entirely different agencies. Particularly the website is often just seen as static and disconnected. There is no realisation that the analytics behind the site must be tied to the activity off-site. There is no real horizontal integration.

Also, there’s the tendency for everyone involved to choose the statistics that work for them. So you got a bazillion fans on Facebook? Great! Suits the agency down to the ground, suits the people working with the agency, suits the managers. It’s a figure, and they understand it, even when you tell them that it’s worthless.

I always think a good, big, important question to ask could be, what’s the ROI of your website? Remove it, and what would the effect be? I expect very few organisations really know this unless they’re running pureplay ecommerce solutions. They probably put up a website a decade ago when we were all swilling in money, whereas social media has come about when we’re strapped for cash. So a website is just something you do. I think social media will go the same way. It’ll just become a box to tick.

I don’t think this is right. I do agree that ROI is imperative. I just think companies will continue to use social media as inefficiently as most other activities they’ve been doing over the years.

Very insightful comment Brendan and I agree 100 percent. Corporate culture and cultural readiness are huge issues. I would guess that 95% of the companies I have seen fit in the box you describe here. Very few are doing it well.

Mark 100%, the comment is out of context, we measure everything. IF u listen to when I told the story I mentioned I showed her all the data she just didnt want Social to succeed so that forced me into the corner and made that comment

I don’t doubt you do Gary. I know you have to with Vayner Media. I have mad respect for you and your passion but as one of the forerunners in this industry, much of the message of no ROI has really paved the way for a lot of ignorance in the industry. I acknowledge that your message has shifted to accommodate the changing landscape, but many have not. This perpetuates the misinformation. People aren’t looking for ROI because they’re told not to.

That being said, I always found the what’s the ROI of your mother question to be a little absurd, but that may be because I was abandoned by mine. That’s context.

This is a seemingly simple issue, with a complex point. Or perhaps a ‘nuanced’ point is more accurate. I’m obviously a believer in data, it’s a big part of what I’ve done over my career. So to be clear, trying to measure whether something has a meaningful impact is something I am in support of. But to try and summarize my point of view on this:

You should always measure….unless you shouldn’t.

1) Spreadsheets should never be a substitute for business instincts. Too many fall back on them as means to avoid risk and accountability. Thus using ROI as an excuse not to move forward with something they don’t understand.

2) Sometimes there is no ROI to measuring ROI. Just because something *can* be measured doesn’t mean it *should* be measured. If the cost of trying to measure an activity outweighs the gain of the activity itself, or eats too far into that gain then why would you measure it? It doesn’t mean there was no gain, it means you have to make a decision based on more than spreadsheets as to whether you can mentally correlate enough benefit to quantifying the activity to continue doing it.

3) Understanding appropriate time horizons and objectives is critical, numbers mean nothing if you aren’t balancing them against proper expectations. If you don’t have a solid, educated theory as to how long an activity should take before it starts showing its full benefits (in a relationship driven economy the long tail activity becomes the norm so this becomes even more critical) then how can you know when to make a decision to stop or increase that activity?

4) Achieving a return on an activity is meaningless with a knowledge of the return on activities you *could* have been doing. Companies have limited resources, they can’t do everything, so they have to maximize those that they undertake. Getting a 20% return on something is a failure if you needed a 40% return to make it a viable alternative to some other activity that gets 30%. So ‘achieving an roi’ isn’t the same thing as ‘achieving success’

5) Understanding the impact of measurement, both positive and negative, is also critical. Measurement impacts the behaviors and decisions inside the organization. How does the measurement motivate or impact the individuals? Does it do so in ways that are beneficial to the customer or in ways that benefit the company in the short term but cut its throat in the long term?

I’ll stop there, but the point is basically “It’s not whether you measure, it’s whether you understand what to do with it”

I have listened to your responses on this issue and at least the tone, if not the intent, is kind of flippant. And I know for a fact that the message is being misinterpreted by young people who look up to you. I hope this feedback is helpful. That is my intent. Thanks for taking the time to comment Gary

As I mentioned below, I believe your message of “measurement” is really being lost sometimes. Granted, I can’t hear everything you say (you are ubiquitous) but I’ve heard enough to see why young people and new marketers would come away confused sometimes. Just trying to present some helpful feedback. Many thanks for your tireless contributions and for taking the time to comment.

Oh God! This resonates with me – here’s what I wrote this week at http://online-behavior.com/analytics/trends There is no such thing as Social media ROI In early 2011, my rant was about the risks of a “social media bubble” and I think it holds true to this date. ROI of social media remains mostly anecdotal; yet, disproportional resources are spent trying to improve such soft metrics as brand awareness, reach, resonance, generosity, influence… and a boatload of unstandardized, secret formula metrics. All this energy spent while on-site business processes often fall short of being optimized.

I have done several workshops on social media ROI and honestly, for most organizations, social media remains an acquisition channel leading traffic to the website. Simply put, I believe social media ROI can only exist when measured and clearly correlated against clearly defined business outcomes, be it on the website or offline. I’m a big proponent of online process optimization, so I often wish focus would be a little less social and a little more about process efficiencies.

We are of the same mind on this, in general. I have been working with one customer for almost three years and only now are starting to get into some social stuff because they had other marketing priorities we had to address first. Having said that, don’t dismiss the qualitative benefits of social media. Often overlooked but just because it doesn;t fit neatly on a pie chart doesn’t mean that it’s not valuable! Thanks for the comment!

Heck, you can measure the number of calls she takes, and other micro-stats to understand what she’s doing on day to day basis. The problem is that social media is a mix of art and science. The science piece scares ‘gurus’ because they are just following the bandwagon.

If a client refuses to use and be social because said efforts are not 100% measurable, with results not 100% trackable and provable, then I have a problem with that client. I think that’s where Gary and David Meerman Scott are coming from. The flippant attitude towards something new that cannot be proven to be a 100% slam dunk is short-sighted, small thinking.

Ah Claire – agreed re: clarity of what you are measuring. I oft break down measurement into specific categories – market, recruitment (traffic), engagement, conversion – and within conversion, I distinguish the KPI (key performance indicators) by relabeling as key purchase indicators. A small word change helps bring focus on what we are trying to accomplish.

I think the hard part is that many assume ROI is only about the dollar return from a sale – but as Danny mentioned in the receptionist example – there are many indicators of health..

Anonymous

But Mark, what about feeling-based ROI? Measurement is so . . . clinical. Shouldn’t we trust our feelings? Shouldn’t we Just Do It? Shouldn’t we use the Force? After all with Panda and Penguin, it’s time for the New Charlatan who just does stuff and pretty much Guarantees that it works?

Great post, Mark. I really like the point that if money gets tight, social media managers better know how to justify their position with measureable statistics. With that said, nobody is asking about the ROI of e-mail. It’s a communication tool that has to be used. In turn, it can be argued that being on Facebook, Twitter, and Google+ is part of doing business today and sometimes it’s difficult to measure what exactly the value is. Now with that said, as a marketing manager myself, someone better be able to explain in some terms or another HOW being on certain social networks are helping our brand. It may not be an ROI calculation, but there better be an explanation of what benefit is coming in and how much it’s costing to receive that benefit. If I feel like the benefit doesn’t outweigh the cost, then as a manager it’s my responsibility to cut bugets or cut programs altogether. The difficulty here is that it’s hard to quantify the dollar impact social media has on the bottom line. So yes, social needs to be measured but it’s not possible to calculate it as a strict ROI calculation.

Hey, Mark, as a side note, I just received your new book and i can’t wait to delve in. Thank you for this post and also for the tools to go with it. Good stuff. In my opinion, this comes down to awareness and the not-so-sexy side of setting up business that works FOR you, rather than you working for your business. I was raised in family businesses, in the Detroit area, so I grew to love building relationships and following up in the old boring ways, as well as creative methods, generating specific, measurable results. Metrics give us feedback we can always use to pivot and move in the same, or different directions, based on what we see happening – OVER TIME. Statistics that are fed through relationship building gets me really excited…but i’m geeky that way :-). To me, this is not an “either/or” discussion (as you say). It’s all part of running “whole” businesses that thrive over time. The thing about adding social to the business strategy is that it does take a level of education, buy-in (yes, at the C-level), and a willingness to go the distance, over time. If a business has the stomach, the patience, and the resources to delve into social as a long-term commitment, your example of a dedicated Community Manager makes complete sense, when done correctly, and with eyes wide open.

As someone who must continually measure the ROI of everything in the company so we can determine what the profit margins are, I assure you our Social Media Marketing and Search Engine Optimization ROI are measured – in great detail – every week. We need to know what works, how well, etc. We are in a constant state of improvement in our company with our service delivery as well as our marketing. Thank you for this post!

Kristin Miller

I’ve read the others’ articles and I agree when you say they are probably trying to make the point that “Just because it’s tough to measure doesn’t mean we shouldn’t do it”. However, your article is spot on in that “if we are exerting effort” and “if we can measure”, we absolutely need to. Love the post!

I am so happy you posted this topic! Thanks Mark for getting the discussion focused on what matters. As a B2B marketing professional, I have many visions of that classic question the CEO or VP of Sales asks you after the major show, webinar, announcement, etc, “That was an amazing effort by everyone in marketing, now how many qualified leads do you think we generated? What positive business outcomes resulted in our amazing marketing efforts?” I know the same is true for social marketing. Social marketing radically changes how we communicate. How we get passionate about our value and communicating that value in customer friendly social social conversations. But I also know that marketing is a continuous battle for positioning and social mindshare. We can only know if we are winning the battle if we have a strategy and a playbook for our target customers, connections, etc. The playbook now requires continuous visibility and adjustments just like the NFL quarterbacks need to look at those print outs of plays after every series. The plays contain the design and execution and yes the measurements. So I applaud the focus on what matters: the SCORE. To get the SCORE is marketing’s job. Social stories and conversations and how they help generate positive business outcomes are the next strategic area for the B2B marketing team to practice, play, and score.

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You’re in marketing for one reason: Grow. Grow your company, reputation, customers, impact, profits. Grow yourself. This is a community that will help. It will stretch your mind, connect you to fascinating people, and provide some fun along the way. I am so glad you’re here. -Mark Schaefer